Product Costing
Overview
Standard Product costing is used by manufacturing companies to calculate the estimated cost of making a finished product.
It starts with entering the finished product information in terms of product details and possibly preferred batch size then adding the estimated labour and material to make that finished product. Once entered the estimated cost of the Standard product is automatically calculated.
Standard Product costing is used by manufacturing companies to calculate the estimated cost of making a finished product.
It starts with entering the finished product information in terms of product details and possibly preferred batch size then adding the estimated labour and material to make that finished product. Once entered the estimated cost of the Standard product is automatically calculated.
Process Detail
Add a Finished product that you want to cost if not already in the system -Click here
Select the below menu to start the costing process
Select the below menu to start the costing process
This screen will appear. It shows a list of products and allows the user to create a Material and labour cost for a product.
This screen has two main section :
Filter the data using the filter section to help find the required product
- The columns on the left are related to creating a Bill of Material and a Routing in order to calculate the cost
- The columns on the right are related to the estimated cost of the bill of materials and the routing
Filter the data using the filter section to help find the required product
How to define a Bill of Materials
To define the materials required to produce this product you have to create a Bill of Material for the finished product.This will automatically create a material cost for that Finished Product.
To define the materials required to produce this product you have to create a Bill of Material for the finished product.This will automatically create a material cost for that Finished Product.
- Click ‘View’ under ‘Create BOM Items’ column you will see following screen.
As products are added / changed the estimated material cost of the finished product is automatically changed with the cost of the raw material
The costing method can be different for each product in the Bill of Material for example it could be the last purchase price or the average FIFO stock value
The costing method can be different for each product in the Bill of Material for example it could be the last purchase price or the average FIFO stock value
How to add estimated labour cost
- press ‘View’ under ‘Create Routing’ column you will see following screen, for more detail about this screen please see Adding Product Routing section
1-Add the stages the product should go through to be made and the appropriate labour times and the resource or machine as required.
2-Add a set up time which is a single time irrespective of the quantity
3-Add how many products per hour should be made and the number of people needed to work together to achieve this
The system assumes you are making one item and uses the average labour cost to calculate the cost for 1 item and also shows the cost of the preferred batch size shown in the initial screen.
2-Add a set up time which is a single time irrespective of the quantity
3-Add how many products per hour should be made and the number of people needed to work together to achieve this
The system assumes you are making one item and uses the average labour cost to calculate the cost for 1 item and also shows the cost of the preferred batch size shown in the initial screen.
